Information about reporting Class 1A National Insurance contributions.
There is no interaction between Class 1A National Insurance contributions and the employee category letters. Class 1A will be reported by a different field in Real Time Information and will have no bearing on the National Insurance contributions category letter used on earnings.
There are no other interactions between an employee’s category letter and the Class 1A rate or liability.
Class 1A National Insurance contributions — rounding rules when payrolling benefits
The rounding rules for Class 1A National Insurance contributions are the same as those for Class 1 National Insurance contributions.
Round National Insurance contributions calculations to the nearest penny (amounts of less than £0.005 are disregarded).
Practical application
For payrolled benefits in kind, you should calculate and report Class 1A National Insurance contributions at employee level for each pay period.
This means a single rounding point should be applied to the total Class 1A National Insurance contributions liability for each employee in each pay period. Where an employee has more than one payrolled benefit in kind, you should not apply separate rounding calculations to each individual benefit before calculating the total liability.
The resulting rounded Class 1A National Insurance contributions amount for the employee for that pay period should then be reported through payroll software.
Example of rounding up
An employee is paid weekly and receives two benefits in kind from their employer during a relevant pay period:
- a company car benefit with a pay period value of £200.00
- a medical benefit with a pay period value of £38.71
Both benefits attract employer Class 1A National Insurance contributions liability.
Benefit amount subject to Class 1A Insurance contributions in pay period: £200.00 + £38.71 = £238.71
Employer liable to Class 1A National Insurance contributions at a rate of 15%: £238.71 × 15% = £35.8065
Applying the rounding rule: Third decimal place is 6 (more than 5)
Rounded value to report = £35.81
Example of rounding down
An employee is paid monthly and receives two payrolled benefits in kind from their employer during the relevant pay period:
- a company car benefit with a pay period value of £400.00
- a medical benefit with a pay period value of £62.63
Both benefits attract employer Class 1A National Insurance contributions liability.
Benefit amount subject to Class 1A NICs in pay period: £400.00 + £62.63 = £462.63
Employer liable to Class 1A NICs at a rate of 15%: £462.63 × 15% = £69.3945
Applying the rounding rule: Third decimal place is 4 (less than or equal to 5)
Rounded value to report = £69.39